May 12, 2019

Did the Uber Lyft Driver Strike Work? Have You Checked Their Post-IPO Stock Prices?

The strike drew attention to just how tenuous the economics are underlying those companies' business model - relying as it does, on taking advantage of drivers even as the companies continue to bleed oceans of red ink - which is one of the reasons their post IPO stock prices have suffered and may never recover.

So yeah, it worked. JL

April Glaser reports in Slate:

The effort attracted a ton of media interest, and it also garnered the
support of high-profile politicians, including presidential
candidates. Consumers may love ride-hailing apps, but the more they become aware
that drivers feel they’re getting a raw deal, the more they’ll be
receptive to politicians who want to do something about it. If the courts don’t do it
first, lawmakers have the power to turn Uber’s big,
thus-far-unprofitable experiment into something that better benefits its
workforce.

Drivers for Uber and Lyft got out of their cars on Wednesday. In major U.S. cities (and a few other places around the world), workers for the ride-hail services organized protests ahead of Uber’s initial public offering on Friday. It isn’t profitable right now, hemorrhaging more than $1 billion a year as it subsidizes its service, which is why Uber has been squeezing driver earnings in recent months as it’s made its case to investors. That’s also why the gig workers who make up Uber’s driving fleet chose this of all weeks to make a very loud point.

Their point was that Uber needs to pay up. At a protest in front of Uber’s Market Street headquarters in San Francisco, a driver named Vinni told me that when he started driving for Uber in 2013, he was paid about $2.20 a mile. Now, he says, he gets about 92 cents a mile. At most jobs, he lamented, you’d think that you’d be making more after six years, not less.

The protest in San Francisco attracted about 300 people, mostly drivers, though a fair number of reporters were there as well. Many of the workers I spoke to told me they learned about the protest on Facebook, where they saw either an ad about the strike from a gig worker organizing group like Gig Workers Rising or a post from a friend. Only two of the more than a dozen drivers I spoke to told me that they’d participated in a driver action before. This seemed to be the first collective action for most of the protesters. “We have to do this,” an Uber driver named Marcos told me. If the pay doesn’t improve, he said, he’d need to find new work, even though he invested in a nicer car for his driving gig. The strike was planned out of Los Angeles, where workers for Uber and Lyft started the group Rideshare Drivers United and called on drivers to picket at the Los Angeles International Airport. Within days, other cities where Uber and Lyft drivers have started organizing jumped on board. San Diego and San Francisco drivers agreed to shut their apps down for 12 hours. Drivers in Philadelphia, Boston, Atlanta, Chicago, and New York also joined in, all calling on riders to support them by boycotting Uber and Lyft in solidarity. Elsewhere around the world, drivers organized actions in Melbourne, London, and São Paulo. Altogether, Wednesday’s demonstrations appear to have been the largest gig worker strike to date.

It’s true that riders likely had no problem hailing an Uber through their apps on Wednesday, wherever they were. But even if you could get an Uber in three minutes despite the “strike,” it would be hard to call this global labor action a failure. For one thing, the effort attracted a ton of media interest, and it also garnered the support of high-profile politicians on the left, including presidential candidates like Sens. Bernie Sanders and Elizabeth Warren. “Your Direct Action for today: Don’t take an Uber or Lyft just for the day. (Just today! Cabs are fine! You can do it!),” tweeted Rep. Alexandria Ocasio-Cortez, urging her followers not to cross the digital picket line. Even technocratic whiz kid Mayor Pete Buttigieg tweeted that

he was down with the driver’s strike.

These callouts aren’t inconsequential, even if Uber didn’t take much of a hit on fares (though we don’t know if that’s the case, and Uber isn’t likely tell us). Consumers may love ride-hailing apps, but the more they become aware that drivers feel they’re getting a raw deal, the more they’ll be receptive to politicians who want to do something about it. If the courts don’t do it first, lawmakers absolutely have the power to turn Uber’s big, thus-far-unprofitable experiment into something that better benefits its workforce. A bill is currently moving forward in California that would reclassify drivers as employees rather than independent contractors. And Sens. Sanders, Cory Booker, and Kirsten Gillibrand have all co-sponsored legislation that would improve gig workers’ collective bargaining power.

but it could prove to be a beginning. Organizing independent contractors who don’t have an easy way to meet each other isn’t easy. Many drivers probably weren’t even aware of the protest, while others likely couldn’t afford to stop working. In San Francisco, one Lyft driver honked in solidarity as she drove down Market Street past the protest. She told me her app was off, though she would definitely have to work later. “I need the money,” she said. Buzzing around the crowd, drivers with clipboards walked around taking down first-time protester-drivers’ email addresses and phone numbers to invite them to future meetings.

The pressure on the company to eventually, one day, earn a profit will only intensify. And the next chapter in company-worker relations will probably be even uglier. Right now, the company wants to pay drivers less while they demand more. It wants to phase out their service in favor of the self-driving cars it’s been trying to develop, while drivers want the company to respect their humanity. The company wants less red tape, while drivers want politicians to help them out—and some politicians are now listening. When a troubled business model meets an angrier and angrier workforce, who wins?

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As a Partner and Co-Founder of Predictiv and PredictivAsia, Jon specializes in management performance and organizational effectiveness for both domestic and international clients. He is an editor and author whose works include Invisible Advantage: How Intangilbles are Driving Business Performance.Learn more...